The House of Representatives is expected to take up a measure to repeal a popular piece of consumer legislation, the Country of Origin Labeling Act (COOL), after the World Trade Organization (WTO) said it violates rules and opens U.S. producers to retaliation from trading partners.
With strong consumer group and some producer support, Congress included COOL provisions in the 2002 Farm Bill, requiring labels to note the country of origin on fresh beef, pork and lamb. The requirement was expanded to fresh fruits, nuts and vegetables in 2008.
It's the meat requirement that is the focus of controversy. While farmers and producers generally supported the labeling requirement, food manufacturers generally opposed COOL, warning that it violated international trade rules and would lead to sanctions against U.S. exports, primarily by Canada and Mexico. Canadian, Mexican and even U.S. meat packers object to the law because they say it increases their costs.
After the WTO ruled in favor of Canada's challenge to the law, the U.S. appealed. The appeals process was exhausted last month, with the WTO ruling in Canada's favor.
House Agriculture Committee acts
Not long afterward the House Agriculture Committee overwhelmingly approved bipartisan legislation to repeal the U.S. law's COOL requirements on fresh meat, while leaving intact the requirements for all other covered commodities.
“This bill is a targeted response that will remove uncertainty and restore stability for the United States by bringing us back into compliance,” said committee chairman Michael Conaway (R-TX).“We must do all we can to avoid retaliation by Canada and Mexico, and this bill accomplishes that through full repeal of labeling requirements for beef, pork, and chicken.”
In the next few weeks the full House is expected to take up the bill and, if the bipartisan vote on the House Agriculture Committee is any indication, passage is likely. That would mean grocery shoppers who can low look on labels to see where fresh beef, pork, lamb and chicken comes from would no longer have that information.
In May the WTO ruled that the U.S. law was “distorting.” That ruling clears the way for Canada and Mexico to impose retaliatory tariffs against U.S. products. Many food industry groups have called for Congress to take action before that can happen.
“This WTO ruling on COOL noncompliance could lead to billions in financial losses to the U.S. food and agricultural sectors when Mexico and Canada impose WTO authorized retaliatory tariffs as early as this summer,” the Grocery Manufacturers Association (GMA) said in a statement.
For its part the Obama Administration has tried to be accommodating. It has revised the labels to try to meet previous WTO objections. Agriculture Secretary Tom Vilsack says Congress has to “fix the problem,” either by repealing COOL or significantly modifying it.
Modifying COOL could clearly be an option. The administration says the WTO has confirmed that the U.S. has the right to impose country of origin requirements, but that the trade body doesn't like how the COOL law was written.